While there are assets being valued for sale, premiums held by brokers in Singapore, reinsurers yet to provide funds and a security bond to draw on, it is estimated that unsecured creditors are owed $3.88 million and there are unsettled insurance claims of $1.95 million.
According to liquidator Grant Thornton's first report, released by co-liquidator Simon Thorn, Western Pacific had "significant financial exposure" to claims arising from the Christchurch earthquake. Its directors determined the company "was not in a position to meet such claims", prompting them to voluntarily place Western Pacific in liquidation on April 1.
"It is expected the [insurance] claims and creditor amounts will increase as insurance claims following the recent [Christchurch] earthquakes are assessed," Mr Thorn said in the report.
Western's directors were Jeffrey McNally, of Australia, and Graham Smolenski. Western Pacific had offered a range of commercial and domestic insurance and acted as underwriting agent and preferred broker.
It had about 7000 policy holders around the country and at the time of liquidation was understood to have at least 155 claims related to the Christchurch earthquakes in September and February.
Mr Thorn said until all claims on Western Pacific were made and assessed, it was not possible to estimate the outcome of the liquidation.
"There is a significant amount of unpaid premium income due to the company which we are endeavouring to collect . . . [and] amounts due from the company's reinsurance arrangements that we are seeking to recover," Mr Thorn said.
He noted that Western Pacific did not maintain its own accounting records - which were looked after "by an external party" - and Mr Thorn was unsure how up-to-date that accounting information was.
Grant Thornton was reviewing and checking that all policies paid for were registered and valid, that reinsurances were in order, and was seeking to sell, transfer or assign insurance business elsewhere.
"We have decided to keep the company's claims department operating as there is a large volume of claims that are yet to be assessed and determined," Mr Thorn said.
There were "certain security interests" lodged by secured creditors on the Personal Property Securities Register.
Western Pacific was subject to claims from both preferential and unsecured creditors, Mr Thorn said, but because of the lack of information it was too soon to consider calling a creditors' meeting.
For the full trading year ended June 2009, Western Pacific received $6 million income from premiums and underwriting fees, then booked expenses at $5.6 million, leaving an after-tax profit of $241,000, compared with a 2008 profit of $281,000.
International rating agency Standard and Poor's slashed Western's investment rating from a B to an R, for "regulatory action", at liquidation.
Standard and Poor's said at the time Western Pacific's "limited capital resources were overwhelmed by two catastrophe reinsurance programme net retentions of $1 million in a short period of time, and the shareholders' failure to inject sufficient capital to maintain solvency at a time of stress".
